Global trade is set to slow further over the coming months – The Peninsula

Global trade is set to slow further over the coming months – The Peninsula

Doha: Few indicators express the overall health of the global economy as well as trade data does. Underpinned by real cross-border transactions, trade data captures the demand for key products and production factors, such as physical consumer goods, capital goods, basic inputs and commodities.

Hence, global trade data tends to be highly sensitive to macro conditions, moving along with the cycles of economic expansion and contraction.

Recently, after the sharp but short-lived collapse in activity following the onset of the Covid-19 pandemic, global trade rebounded strongly.

In fact, according to the Central Planning Bureau of Netherlands for Economic Policy Analysis (CPB NEPA), global trade volumes surged 30% since the depths of the Great Pandemic Recession, far surpassing pre-pandemic levels and comfortably reaching all-time highs. Surprisingly, this has been taking place even as severe bottlenecks and supply-chain constraints from the pandemic persisted in certain key segments, such as chip production and port congestion from recent lockdowns in China.

However, global trade volume data tends to give us a picture of the recent past rather than the present or the incoming future. CPB NEPA data, for example, are released with a delay of three months, which means that their recent print reflects trade volumes from February